Picking the right life insurance coverage can be a daunting project. Coverage options are varied and have lots of moving parts. It can be tempting to pick the least expensive coverage and forget about it, but it’s worth taking the time to understand your options and how they can impact your dependents after your death. Broken down into the simplest terms, there are three primary things to consider when buying life insurance.
1) When to Buy: The younger and healthier you are, the lower your premiums are likely to be. The downside is that you may end up paying more even with lower premiums with the extended period of time paying for them. If you plan on building a family, weight the benefit of a lower premium with the time you anticipate paying that premium to find the sweet spot.
2) How Much to Buy: The total value of your insurance coverage can be determined in two basic ways, needs-based or income-replacement. Needs-based takes into account the unique requirements of your beneficiaries while income-replacement is a simple calculation based on your annual income. Needs-based can provide more personalized solutions, but it does take more effort to calculate.
3) What to Buy: There are different types of life insurance policies available, the most common being term and cash-value (or permanent). Most go with term life insurance because it’s simple to understand and often has lower premiums – you simply pick your coverage amount and the duration coverage is in effect. Cash-value insurance can be a better option for some, but is a complex subject. It’s best to consult a professional to help you understand the way this investment-style insurance policy functions.
To help you navigate life insurance options and make the right decision for you and your family, contact Fuhriman Insurance Agency today for an in-depth discussion of their coverage options and a quote that suits your budget.